The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 32,000 $ 46,000 Work in process 9,900 20,700 Finished goods 52,000 33,700 Activities and information for May Raw materials purchases (paid with cash) 176,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 9,000 Indirect labor 46,000 Other overhead costs 110,500 Sales (received in cash) 1,600,000 Predetermined overhead rate based on direct labor cost 55 % 1. Compute the following amounts for the month of May using T-accounts.
i. Cost of direct materials used.
ii. Cost of direct labor used.
iii. Cost of goods manufactured.
iv. Cost of goods sold.*
v. Gross profit.
vi. Overapplied or underapplied overhead.
2. Prepare journal entries for the above transactions for the month of May.
i. Raw materials purchases for cash.
ii. Direct materials usage.
iii. Indirect materials usage.
3. Prepare journal entries for the above transactions for the month of May.
i. Direct labor usage.
ii. Indirect labor usage.
iii. Total payroll paid in cash.
4. Prepare journal entries for the above transactions for the month of May.
1. Incurred other overhead costs (record credit to Other Accounts).
2. Applied overhead to work in process.